Apache Corp. said Tuesday it agreed to buy a handful of BP's oil and natural gas fields throughout North America and Egypt for $7 billion, though the oil giant's Prudhoe Bay, Alaska operations were not part of the deal.
Apache Corp., known for purchasing mature oil and gas properties and wringing more value out of them, will scoop up BP properties in Alberta and British Columbia, as well as the Permian Basin of West Texas and New Mexico and Egypt's Western Desert. All told, the Houston oil and gas company will add estimated proved reserves of 385 million barrels of oil equivalent to its portfolio.
BP will get $7 billion in cash — a big chunk of its goal of raising $10 billion at least this year for its clean-up effort in the Gulf of Mexico. The U.K. oil giant laid out plans last month to raise cash as it set up a $20 billion victim fund for the worse spill in U.S. history.
No reason was given why Prudhoe Bay, which had been reported to be part of the assets for sale, was not included. BP spokesman Robert Wines declined to comment about any Alaska deal and attributed reports on it to "market rumor." Apache spokespeople could not be reached for comment.
Apache CEO G. Steven Farris said the deal marks a "rare opportunity to acquire legacy positions from a major oil company," with oil and gas production in place as well as prospects for new exploration.
"We seldom have an opportunity like this in one of our core areas let alone three," he said. He pledged Apache would add value to the properties "for decades to come."
Separately, Apache set plans to issue 21 million shares of common stock as well as $1.1 billion in preferred stock. Based on its closing price of $88.28 a share on Tuesday, the common offering will raise about $1.9 billion.
Gelsi writes for MarketWatch.com/McClatchy.